How Will Artificial Intelligence Change Payment Processing?

artificial intelligence payment processing

MasterCard recently announced they are acquiring Brighterion, a major company in the artificial intelligence and machine learning space. Although neither company is disclosing the acquisition price, this is a very interesting piece of news for the entire payment processing industry. Brighterion has been working on a suite of fraud prevention technologies, technologies that will now help MasterCard and which can be replicated by numerous other payment companies to ensure higher security.

According to industry experts, this acquisition is a continuation of MasterCard’s focus on acquiring risk-quantifying and predictive technologies in response to greater financial security threats. Since AI and machine learning have become such a hot topic across numerous industries, we want to focus on exactly what it may mean for payment processing.

Artificial Intelligence and Machine Learning

Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems. Machine learning is a specific type of AI. It allows software applications to become more accurate in predicting outcomes without being explicitly programmed.

But how can they help the payment processing industry?

  1. Fraud Prevention

Although EMV technology has done a lot to protect consumers from having their credit card information stolen, fraud remains a very big issue. As threats continue to evolve and get more sophisticated, companies like MasterCard need a way to stay ahead. As this specific acquisition demonstrates, companies are looking toward AI and machine learning for solutions. Advances in things like facial recognition, fingerprinting and more are making hacking and identity theft more and more difficult.

  1. Consumer Convenience

Brighterion focuses on preventing fraud by identifying patterns and trends in individual consumer spending. It’s easy to see how the same AI and machine learning technologies could be used in ways that make things better for consumers. MasterCard alluded to this in a statement about the acquisition, saying “artificial intelligence plays a critical role in enabling consumer convenience.” Making it easier to make payments in person and online is a huge time saver and could make all the difference for new small business owners.

  1. Good News for High-Risk Merchants

We’ve previously discussed processing options for high-risk merchants. Even with these options, merchants who are considered high-risk often have to deal with less-than-ideal terms. Part of the challenge is there simply aren’t truly reliable ways to detect all the different kinds of fraud that exist. Fortunately, this is something that’s likely to change as more solutions are rolled out around AI and machine learning. By harnessing these solutions as they’re made available, merchants will be able to lower their risk profile and reap the rewards.

  1. Better Online Customer Engagement

Over the last few years, live chat and similar solutions have made the online shopping experience more engaging than ever before. However, merchants of all sizes still see a lot of room for improvement. Through a combination of predictive analysis and chatbot technology, merchants will continue to gain access to tools that make it possible to deliver the type of online experience required for converting more website visitors into actual customers.

And these are just the benefits we can actually forecast. As technology continues to advance, there’s no telling just how many benefits there will be for business owners and shoppers alike.